This story was originally published by KFF Health News.
By Bram Sable-Smith, KFF Health News
ST. LOUIS — Missouri healthcare advocate Leslie Ortbals and her husband want to start a family, but she worries they can’t afford it. The 27-year-old said she takes 10 medications daily to manage multiple chronic illnesses.
Now she worries the cost of those drugs could rise — not because of price increases, but because of a tax system revamp put on the ballot by the state’s Republican-dominated legislature and backed by the Republican governor.
In August, Missouri voters will weigh in on a proposed constitutional amendment to give the legislature the power to replace the state’s income tax with expanded sales taxes, including on goods and services currently exempt.
“Politicians want Missourians to trust them when they say not to worry about our medications and healthcare being up for grabs,” Ortbals said at a June press event organized by Progress MO, a progressive advocacy group. “I have spent enough time in Jefferson City to know better,” said Ortbals, who works for a Democratic state legislator but was speaking in her personal capacity. “I have watched them speak about protecting life while making lifesaving healthcare less accessible.”
Taxes on healthcare are unusual in the United States but not unprecedented. Most states already tax over-the-counter drugs. Illinois, Missouri’s neighbor, is the only state to also tax prescription drugs. Delaware, Hawai’i, New Mexico, and Washington all have taxes on services by physicians, dentists, out-of-hospital nursing providers, and medical laboratories.
Critics of the amendment to eliminate income tax in Missouri say it’d be difficult to make up the lost revenue without also imposing taxes on healthcare. Nearly two-thirds of the state’s general revenue budget comes from income taxes, about $8.7 billion in 2026. Failing to make up that revenue could lead to steep cuts in state services.
The proposed tax cut comes at an already precarious time for the state budget. Missouri Gov. Mike Kehoe restricted about $440 million in spending in this year’s budget over concerns of lagging revenues. The state legislature has passed a series of tax cuts since 2022, including repealing capital gains taxes. Federal covid aid has propped up the budget in recent years, but the state’s auditor recently warned that the surplus is dwindling. And the state is projected to lose about $14 billion in federal Medicaid funding over 10 years due to cuts from President Donald Trump’s signature One Big Beautiful Bill Act.
Proponents of the Missouri income tax proposal, such as Elias Tsapelas of the Show-Me Institute, a conservative think tank, say the cut would spur economic and population growth in the state, both of which have been flat in recent years. He doubts healthcare would be among the things subject to sales tax. But even if it were, he said, it could be done in ways that wouldn’t target lower-income residents. New Jersey, for example, taxes cosmetic procedures (excluding reconstructive surgeries), which tend to be performed on wealthier people.
In a statement to KFF Health News, Kehoe spokesperson Gabby Picard said the governor “will never support extending sales taxes on agriculture, healthcare, or real estate,” noting that the legislature would have to decide what to exempt if the ballot measure passes.
Federal law already prohibits states from imposing taxes on many healthcare services covered by government programs such as Medicare, the federal health insurance program for seniors, and Medicaid, the joint state-federal health insurance program for people with low incomes or disabilities, Picard wrote. More than a third of Americans were insured through those two programs in 2024.
But Jay Hardenbrook, advocacy director for AARP Missouri, argued that raising taxes on healthcare, real estate, and agriculture is the real reason for the amendment, considering the legislature doesn’t need special permission to cut income taxes.
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